Relevant and even prescient commentary on news, politics and the economy.

Events at Davos, a Child Meets a Scholar (in that Order)

Seriously, I would not fit there; but, I am smart enough to keep my mouth shut, listen, and learn. Apparently Trump is not.

Trump Commenting on Elon Musk: “I was worried about him, because he’s one of our great geniuses, and we have to protect our genius,” Trump said of Musk. “You know, we have to protect Thomas Edison, and we have to protect all of these people that came up with, originally, the lightbulb, and the wheel and all of these things.”

The wheel made its first appearance in Mesopotamia — an ancient region that corresponds mostly to present-day Iraq — around 3,500 B.C. ”

Hat Tip to: Josephine Harvey, HuffPost, January 22, 2020.

Meanwhile Greta Thunberg at Davos: “I wonder, what will you tell your children was the reason to fail and leave them facing the climate chaos you knowingly brought upon them?” Ms. Thunberg, 17, said at the annual gathering of the world’s rich and powerful in Davos, a village on the icy reaches of the Swiss Alps.

“Nothing has been done.”

“Our house is still on fire,” she added, reprising her most famous line from an address last year at the forum. “Your inaction is fueling the flames by the hour.”

NYT, Somini Sengupta, January 21, 2020

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Catching up: November JOLTS report

Catching up: November JOLTS report

Let me catch up on some data I didn’t examine last week: the November JOLTS report.

It decomposes the jobs numbers into a number of metrics, but is less than 20 years old, so only covers one full business cycle, so is of limited forecasting use.

To reiterate, here is the order in which the JOLTS series peaked during the 2000s expansion:

  • Hires peaked first, from December 2004 through September 2005
  • Quits peaked next, in September 2005
  • Layoffs and Discharges peaked next, from October 2005 through September 2006
  • Openings peaked last, in April 2007

So to start, here are YoY hires and quits for the entirety of the series, measured YoY

Hires has turned negative for some months in the past year, while quits remain positive YoY.


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The Democratic Debate in Des Moines: progressive candidates on means testing versus universality

The Democratic Debate in Des Moines: progressive candidates on means testing versus universality

Dana Chasin at 2020 Vision does a good job of encapsulating key issuesthat surface in the Democratic debates.

Let’s get this out first:  most listeners will admit that the debates seem both too long and too short, as mentioned on Stephen Henderson’s Detroit Today program this Wednesday 1/15 morning.  They are too short, because candidates are interrupted at the 30-second time limit and not allowed to develop nuanced, considered answers to questions.  They are too long, because they go on for 2 hours.  I’d add that they are problematic, because the media pundits have their own views of what creates energetic dialogue that makes good ‘copy’ for programming, versus the kinds of in-depth discussions about issues like climate change, health care, education, the Supreme Court, congressional oversight/checks and balances, tax policy, wealth inequality and income inequality, plutocracy and oligarchy, etc. that people want to hear.

One important distinction that Chasin notes for thinking about socio-economic programs is the distinction between means testing and universality.  A means-tested program is generally available to lower-income people and often phases out and is capped at some income level beyond which it is no available.  A universally offered program is one that is available to all, rich and poor alike.  So the Earned Income Tax Credit is a means-tested program that is capped (too low, in my view), and Social Security is a universally available program (though there is a graduated payout scale and the funding formula caps pay-ins to the program at a ridiculously low level that means the rich pay only a pittance into the program)

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Rep Jayapal and Sen Sanders Have Introduced Medicare For All Bills: Part 2

Part 2 discusses why we must have the government issue payments to hospitals, clinics, etc. and also set the budgets for hospitals and this is how they are paid rather than billing multiple insurers and also patients. There is also only one payer. The later part is what I have been pounding on repeatedly. Forget prices and work with cost data. It is then we have a much clearer picture of the costs of healthcare and we can begin to control prices.

Rep Jayapal and Sen Sanders Have Introduced Medicare For All Bills: One Is a Lot Better Than the Other, Healthcare for All Minnesota, Kip Sullivan, May 8, 2019

What is an ACO and why is it a defect?

Congress included in the Affordable Care Act of 2010 (aka Obamacare) a section (Section 3022) requiring CMS to establish an ACO program within the traditional FFS Medicare program. It is not clear why Congress chose to use ACOs. Congress was warned in 2008 by the Congressional Budget Office (CBO) that ACOs would not save money for Medicare. The simplest way to describe ACOs is to say they are HMOs in training. Like HMOs, they are corporations that own or contract with chains of hospitals and clinics; they have the equivalent of enrollees; they attempt to keep their “enrollees” from seeking care outside their networks; they bear insurance risk (that is, they are paid on a per-enrollee basis and in exchange are obligated to provide medically necessary services to their enrollees); and because they are risk-bearing organizations, they generate overhead costs similar to those created by traditional insurance companies.

More on ACOs and the absence of Single Payer budgets past the leap

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Majority Say Senate Should Remove Trump

EMichael: I don’t understand why people have such a hard time believing that there is no such thing as an “independent” voter. Sure, a lot of people register as an independent, but that certainly does not mean they vote for one party or the other depending on the candidates and/or circumstances.

Plenty of studies have shown that independent voters are even more loyal to one party or the other than party registered voters. In other words, when they vote, they vote for just one party.
And polls show the exact same thing whenever they appear. Like this:

“The new poll also finds majorities of Americans view each of the charges on which Trump will face trial as true: 58% say Trump abused the power of the presidency to obtain an improper personal political benefit and 57% say it is true that he obstructed the House of Representatives in its impeachment inquiry.

Massive partisan gaps continue to dominate views on Trump and his impeachment trial. Overall, 89% of Democrats say he should be removed from office, while just 8% of Republicans feel the same way. Among independents, it’s nearly dead even: 48% say the Senate should vote to remove him, while 46% say that they should not. Views on whether Trump should be impeached and removed are also evenly split across battleground states, 49% are on each side across the 15 states decided by 8 points or less in 2016. Those states are Arizona, Colorado, Florida, Georgia, Maine, Michigan, Minnesota, Nevada, New Hampshire, North Carolina, New Mexico, Ohio, Pennsylvania, Virginia and Wisconsin.”

CNN poll: 51% say Senate should remove Trump from office

What this means is that half of independent voters are Dems and half are Reps. It shows the folly in attempting to attain independent votes desires, which always leads to a centrist stance. Dems need to cater to their progressive goals, and the half of the independents who are really Dem voters will follow along. And half of the independents who are Rep voters will shy away. It’s not like they are going to vote Dem in their lifetime.

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Two Chears for Nicholas Fandos

The standard rule that reporters cover both sides of a debate and find some source to contest lies rather than doing it in their own name (and the name of the newspaper) has not survived Mitch McConnell’s office.

In the New York Times, Nicholas Fandos notes that “A senior Republican aide in the Senate” lied on a very simple fact which is in the public record.

The aide, speaking on the condition of anonymity to detail internal strategy, argued that in doing so, the House had denied Mr. Trump proper due process rights afforded to Mr. Clinton, suggesting the current president was not given a chance to contest the House’s record.

The House invited Mr. Trump to mount a defense before the Judiciary Committee during its impeachment proceeding, including requesting witnesses and documents, but the president’s legal team declined, saying it would not dignify an inquiry it deemed illegitimate with a response.

So it is very good that the lie was clearly described as a lie. I accept the Grey Lady’s style which does not allow the use of the appropriate plain English words “lie” or “lied”. I think it would be better to have written that a source resorted to flat out lies when attempting to justify McConnell’s decision to break his work, without quoting the lie and just noting that the source lied. But I don’t expect to convince anyone.

However, I do not think that anonymity should be granted without the qualifier that the reporter will name the source if the reporter is convinced that the source lied.

I do not think anything is gained by allowing people to infect the discussion with flat out lies. Reporters will not recklessly burn sources in ambiguous cases, as that will be punished. Reporters will be punished for adding the qualifier. Therefore, I think it must be made a matter of policy that reporters are not allowed to hide the names of liars.

I note also that the justification for the grant of anonymity is based on another lie. The aid aims to convince the public with an argument. The claim that the deliberation was meant to be private is simply another lie. This shows the worthlessness of the rule that reporters must explain why they grant anonymity. The practice is to report a lie used to request anonymity as an un-contestable truth.

Also, I am not a lawyer, but I think that the senior aid slandered the House of Representatives and its Judiciary Committee. The claim is false. It is a matter of very public record that it is false. Needless to say the House of Representatives is as public a figure as there can be, and Senate aids are as close to having “speech or debate” immunity as is anyone who doesn’t actually have that immunity. Given those considerations, I think the aid is liable for slander. The statement was a damaging flat out lie. He or she must have known that it was a lie. The highest possible standard is very low compared to the level of the tort.

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What Is Up With Empirical Economics?

Tyler Cowen today flags a paper by Currie, Kleven, and Zwiers on changing practices in economics, and highlights the following:

Panel A illustrates a virtually linear rise in the fraction of papers, in both the NBER and top-five series, which make explicit reference to identification. This fraction has risen from around 4 percent to 50 percent of papers.

This caught my eye, because Matt Yglesias at Vox recently highlighted a study claiming to show large educational benefits from air filtering in schools:

This paper identifies the achievement impact of installing air filters in classrooms for the first time. To do so, I leverage a unique setting arising from the largest gas leak in United States history, whereby the offending gas company installed air filters in every classroom, office and common area for all schools within five miles of the leak (but not beyond). This variation allows me to compare student achievement in schools receiving air filters relative to those that did not using a spatial regression discontinuity design. I find substantial improvements in student achievement: air filter exposure led to a 0.20 standard deviation increase in mathematics and English scores, with test score improvements persisting into the following year. Air testing conducted inside schools during the leak (but before air filters were installed) showed no presence of natural gas pollutants, implying that the effectiveness of air filters came from removing common air pollutants and so these results should extend to other settings. The results indicate that air filter installation is a highly cost-effective policy to raise student achievement and, given that underprivileged students attend schools in highly polluted areas, one that can reduce the pervasive test score gaps that plague public education.

Kevin Drumm was quick to spot the problem in the paper (click through to see the data).

Then Andrew Gelman weighed in:

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For MLK Day: unemployment by race

For MLK Day: unemployment by race

In observance of Martin Luther King’s birthday, almost all US markets are closed and there is no economic data.

So on this day let’s see the extent to which economic opportunity in several neutral metrics has improved since the passage of the Civil Rights Acts in the 1960s.

Here in unemployment for African Americans (blue) vs. whites (red) since the former began to be measured in 1972 (white unemployment had been measured since the 1950s – interesting that black unemployment wasn’t even deemed worthy of being separately measured before the 1970s!):

Unemployment for whites made a 50 year low at 3.1% earlier in 2019. It was only lower, at 3.0%, in 1969 (not shown). African American unemployment made its all time low, at 5.4%, in August of last year.

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